When evaluating the opportunity cost of choosing to produce one good over another, the value of the next best alternative that is forgone is known as __________.

When we talk about opportunity cost, we are referring to what we give up when we make a choice. Specifically, the opportunity cost of producing one good over another is the value of the next best alternative that we do not choose. For example, if a farmer decides to grow corn instead of wheat, the opportunity cost is the profit he could have earned from growing wheat. This means that by choosing corn, he is missing out on the benefits of wheat, which is his next best option. Understanding opportunity cost helps us make better decisions by considering what we are sacrificing for our choices.